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Published: Thu, 14 Sep 2017

International Human Resource Management

Abstract

Globalization has to lead the companies to understand the cross-cultural challenges they face when planning to expand in the global markets. At the same time, it is important to train the employees so they are ready to face these cultural challenges. The report consists of a comprehensive review of literature and theories about cross-cultural adjustments and training techniques. The report then looks into preparing and training the expatriates of U Mobile while looking at these theories.

The report gives an in-depth review of training models for both pre-departure and posts departure training of the expatriates. For pre-departure training, the aim is to provide very general cultural training ` whereas the post-departure training is focused on the host country’s culture. The post-departure training will also include the language training. The report also suggests a further more comprehensive post training and ways to make the overall training more cultural based.

Introduction

The world is moving fast with technology overcoming the geographical barriers. People are communicating worldwide in a blink of an eye. The corporate world is also facing these challenges of globalization where if they need to survive, the need to make sure they have footings worldwide. Companies are expanding by opening their outlets in foreign countries or by having a merger with existing companies. Researchers have shown companies prefer merger in case of countries having strong legal restrictions (Raihan and Azeem, 2011).

With the expansion of companies in other countries, the employees face cross-cultural issues. Where the company’s prevailing culture differs from that of new company’s subsidiary country. The employees need to be trained in order to cope with the cross-cultural challenges.

Training refers to preparing employee’s behavior, attitudes and knowledge in accordance with the current job role. Hence training increase employee’s effectiveness for the particular job role. Whereas development is a continuous process where the employee is not only prepared for any specific task but it help employee get ready to face challenged in future jobs and walk role. (Gomes, 2009)

Our company U Mobile plans to open a subsidiary in India. Hence we need to prepare our employees to face the cultural challenges that wait ahead of them in Indian subsidiary. The company needs to go for Cross Cultural Training. Cross culture training is necessary to equip employees for future job roles in India. Cross Cultural training is a process in which employees are given orientation and skill improvement mainly on Indian Culture and work life in the new environment. (Gomes, 2009)

The cost of sending an expatriate on an international assignment is always high. The cost incurred in the first year on expatriate is three times more than the local employee’s annual salary. (Shaffer, Harrison & Cilley, 1999), therefore the company will expect them to deliver likewise.

The report includes the type of training required by our current employees and the way these training will be scheduled. The report will also cover the important cultural, political, economic and institutional differences between Malaysia and India.

Company Profile

U mobile is a Malaysian based telecommunication company which was founded in 1998. U mobile is a subsidiary of U Television Sdn Bhd. The company not only provides mobile telephony and mobile data but also offers a mobile TV service and Mobile Live Tv.

In the initial five years of its operation, U Mobile was able to increase its subscriber base to over four million because of its competitive product innovation and value proposition. The major shareholders of U mobile are ST Telemedia and U tele media. Both the shareholders provide U Mobile with strategic relationships globally along with financial, technical and operating experience and expertise. U Telemedia’s has helped U Mobile to reach out to a wider audience, leveraging on Berjaya Group Berhad’s nationwide distribution channels and multiple retail outlets. (Source: U Mobile Official Website, Retrived from: http://www.u.com.my/all-about-u/corporate-profile)

Analyzing the Host Market

In order to successfully implement the training sessions, we first need to understand the differences between the environment and culture of the Malaysian market and the Indian Market.

Political Conditions

The current political conditions of India are stable and it’s being predicted that it will remain stable in future also. The country, however, faces problems like corruption and religious issues and that corruption won’t create any issue for U Mobile (Ranga, 2013) but as the country faces issues on religious grounds therefore it can pose an issue. The recent deadly attacks against members of religious minorities are worrisome (Meinardus, 2015), as U Mobile is a Muslim country based company, we might have to face some problems in these areas.

Economic Conditions

The overall economic activity in India is starting to ease after demonetarization in October to December period of 2016. The exports rebounded in January 2017. The overall economic growth has slowed down in the year, reaching a three-year low of 6.9. However, the growth is predicted to go up after February 2017 up to 7.4%. (FocusEconomics, 2017)

It will be feasible for Malaysian bases U mobile to open subsidiary in India, as Malaysai and India are the largest economic partners in South Asia. The bi lateral trade agreement between the two countries specially since India initiated liberation measures indicates two way trade has increased 17 times since 1992. U Mobile can also take advantage of this economic relation between the two countries. (Source: High Commission of India, Kuala Lumpur, Malaysia)

Institutional Conditions

The supply market conditions of human resource in India are very feasible. The Indian education system is very focused on higher education (Becker-Ritterspach, 2000). It has the most number of engineers and scientists in the world. These conditions are feasible for providing human resources for MNC’s in India.

For Telecommunication Company like U Mobile, Indian labor market promises to provide talented and educated human resource at low cost. As far as the average wage is concerned, it is low comparative to the Malaysian market.

The only challenge an MNC would face is that human resource has a general lack of practical skills. This is because of India’s higher technical education system’s structure (Heitmann, 1995).

Cultural and social Factors

India has the world’s oldest civilization and also the most populated country in the world. Indians are mostly Hindu with Hindi as their national language. Most of them are vegetarians. People are tech savvy and are developing in the field of telecommunication and technology.

India faces two world-views when it comes to culture. There is one group of people who are modern Indians who wishes for a secular, liberal multi-religious culture. These are the people who want to exploit the myriad chances of cultural openness with respect to globalization.

There is another group who are against the cross-cultural concept. The openly reactionary Hindu nationalist movement is one of them. They aim to have a strong Hindu nation and are not open to liberal civil liberties and religious pluralism. ( Zimmerman, 2015)

The expatriates from U Mobile will face these cultural barriers, being nationals of Muslim country. The expatriates needs training to get knowledge of Indian norms and culture. Language will be a barrier too, training would be provided to help overcome it.

Literature Review

Cross Cultural Management

It is important for the companies to understand the cultural differences that are occurring due to their expansions from one region to another. The research in the field of psychology, sociology, and anthropology have shown that there are countless major differences among the cognitive process of individuals belonging to different cultures. In the era of globalization, where companies are expanding in different regions, it is utmost important for them to understand and recognize these cultural differences and appropriately use them in organizations. (Nancy & Robert, 1986)

The companies need to understand the cross-cultural management, as it would greatly benefit them considering the cognitive aspect of culture in managerial practice.

Cross-cultural management is all about managing work teams in a way where the difference in culture, preferences of the consumers, and the practices are managed to keep in view the global and international context. The cross cultural management deals with cultural issues at individual level as well as for the company as whole. At the individual employee level these include cross cultural psychology, sociology and anthropology and for general organization as a whole or at a broader prospect it includes broader disciplines of management and organizational behavior and related international human resource management. It also studies the influence of culture on organizational structure and management across nations and cultures. (Thomas, 2014)

International Human Resource Management

Global expansion of companies have raised the need to understand importance of international Human resource management. It is all about managing the human resources in order to face the challenges of global expansions. The cultural differences are of the top most importance. Human resource is the base of any company, which if not trained and allocated properly, can hinder the success of the overall company’s ressources.

MNCs need to understand the factors that affect the multinational corporations while they expand in different regions. These include assembling and training the international staff, designing policies which are appropriate for personnel and organization, working of trade unions in different countries, and devising an international labor division. (Harzing & Ruysseveldt, 1996)

There have been a number of changes in the field of IHRM which have changed the nature of careers at MNCs. (Dickmann, 2005). IHRM has also impacted employee’s attitude towards the company and they tend to accept international assignments. (Hugh, David & Patrick, 2007)

Employment Relation

The legal relationship between the employer and employee is termed as employment relation. This is not just the legal written contract of employment, but also the psychological contract between the employee and the company. This provides a framework for the issues of fairness and trust that lies between the employee and the employer. (David, 2004)

Companies need to invest in their employees in the form of trainings. Researches have shown that employees perform better on given tasks and demonstrate more citizenship behavior if they work in the environment where employer invests on them. (Tusi & Pearce, 1997)

Why Multinationals Prefer an Incorporated Subsidiary, Not Just a Branch

Companies prefer going for subsidiary in the host country rather than a branch. There are number of reasons for choosing to open subsidiary instead of a branch. It is because by opening incorporated subsidiary, it protects the parent company from any liabilities which are imposed on the host country’s subsidiary. Subsidiary simplifies accounting and bookkeeping. It also makes the tax compliance less costly and more efficient and also enables a company to qualify in local contracts. (Gordon, 2005)

It is essential for any company to hire the right candidates in order to successfully run its operations. With an increase in global competition, it is of utmost importance to hire competent employees who can perform for the company in the long run. (Richardson, 2006)

Companies follow a complete recruitment process while they hire right candidates. There are basically two types of recruitment; internal and external recruitment. Internal recruitment is done when company plans to hire from within a company whereas, external recruitment is when company plans to generate the pool of individuals from outside the organization (Schuler, 1986)

When companies go for internal recruitment they post ads in newsletter, job posting on board, and usually by word of mouth. Whereas when opting for external recruitment companies can take help from external recruiter, post a job ad in newspaper, social media and recruitment websites (Richardson, 2005).

Research Methodology and Research Design

Cross Cultural Training of Expatriates

When a company decides to open a subsidiary in any other country of choice, the first thing that is required is training the employees according to the challenges they might face in performing their role efficiently in the host country. There are a number of trainings that can be provided to the expatriates, broadly speaking, pre-departure training program and post arrival training program. (Hanberg and Osterdahl, 2009)

Pre-Departure Training

Cultural Adjustment

Expatriates who are being send to a foreign country, are expected to stay there for a longer time period. They need to adjust according to the culture of the host country. In our case, employees will be sent to India, therefore before their departure, they need to be trained in order to be aware of the culture of India. (Black & Gregersen, 1991)

Cross Cultural Training Methods

To enable the employees to effectively y interact with the people of host country, companies use a number of methods to guide their expatriates for cross cultural skills. For doing so, companies use the following training methods: ( Hanberg and Osterdahl, 2009)

Didactic Training

Didactic training is focused on factual information of general culture of host country; in our case India. This training is performed by giving lectures and informal briefings. This method of training can be adopted before departure and also for post arrival training.(Hanberg and Osterdahl, 2009)

Experiential Training

This training method focuses on practical learning and enable an employee to gain knowledge of cultural specific adjustments. These trainings are performed by workshops, simulations and look-see trips arranged for the employees. (Hanberg and Osterdahl, 2009)

Attribution

These type of trainings are also cultural specific, where expatriates learn to think and act as a national of host country. These are pre departure trainings and provided as cultural assimilator technique. (Sulmer, 1998)

Language

This training is very important to enable the employee to effectively communicate in host organization. This is also a pre departure training process, provided to the employees in a way of traditional teaching style. (Hanberg and Osterdhal, 2009)

Cultural awareness

The aim of this training session is to help expatriate understand culture of the host country as a concept. It is also a pre departure training program conducted in the form of role plays and self-assessment exercises.( Hanberg and Osterdhal, 2009)

Interactive Trainings

These trainings focus on employee’s learning from previous expatriates of the company. These are also cultural specific trainings provided before departure of an expatriate. These are mostly on-job trainings.( Hansberg and Osterdhal,2009)

Cognitive Behavior Modification

This training focuses on learning to focus on rewarding activities. These are pre-departure trainings and are given in the form of counseling.( Selmer, 1998)

Sequential Training

The training method focuses on synergies from combined training, where different types of training methods are combined.(Selmer, 1998)

U Mobile will be providing its expatriates with basic didactic training, where the employees will be given cultural overview of India. It will enable the employees to keep realistic expectation of the culture in the host country and help them not to face cultural shock. (Selmer, 1998)

Methods Of Pre-Departure Training

The best pre-departure training would be attribution and cultural awareness. As it will give a complete overview of the Indian culture to the expatriates before leaving to take up their roles in Indian subsidiary.

The expatriates will be provided with language training. It will focus on both social language and business language of India, as business language is not always same as social language. (Claydon, 2009) They will be provided at least 20 hours of language training sessions.

The expatriates will be sent to India at least once to have firsthand information of the country. In this way they will get a general idea of the culture and people of India.

Method for Post- Arrival Training

The Post arrival training program that must be adopted by the company is Interactional learning. It will provide expatriate an authentic cultural context. It will enable expatriates to realize the actual challenges he/she will face. (Grove and Torbion, 1985)

An Induction program will be performed when the expatriate arrives in India. It will be a general program to help expatriates understand the true organizational culture in India. (Claydon, 2009)

Challenges in Recruiting Expatriates

Recruiting the right candidate is one of the most essential job of Human Resource Department epecially, when hiring an expatriate, it is of utmost importance to recruit the best possible candidate as companies have failed to prosper when they hire the wrong candidate.

The HR department must make sure they hire the candidate having expertise in the field. MNCs face problem with technical knowledge of the candidate. The expatriate must be aware of the culture of the Host country. He must be able to overcome the barriers of language, and religion.

One of the major challenge in international hiring is, especially in state like India, people are narrow minded when it comes to religion. Hiring an expatriate having in depth knowledge of religious beliefs of Indian community is an important aspect.

Another challenge in international recruiting or recruiting the expatriate is time frame. At times, expatriates face difficulty in attaining the work permit visa. In this time, the concern of the employer is to keep the position open and they also lose revenues. It takes time to fulfill legal obligations for employee in the host country.

Not every candidate is willing to relocate, therefore its challenging for the MNC to find the right candidate, who is also willing to relocate and work in a completely different environment. At times it also effects the work-life balance of the employees. Expatriates have difficulties managing to live without family in a foreign country.

The local employees of a subsidiary are at times not welcoming for the expatriates.

Training and Development of Global Leaders

MNCs must prepare suitable training plans for their global leaders. If MNCs send wrong people without proper training and development, it can hinder company’s success and will be a waste of time and resources (Goodman, 2016).

Companies which have well defined global leadership development programs have proven to be more profitable than those who don’t invest in training future leaders.

The MNC’s training and development program must aim to create long and short term international projects. These programs must help their leaders to immerse in another culture. The global leader must be trained to see the world from the prospect of other cultures (Goodman, 2016).

The international training programs should be included in the early years of the candidate’s career. Leading MNC’s have created intricate global immersion programs for high potential young leaders. (Goodman, 2016)

MNC must ensure continuous contact process between the local leaders of the home country and the global leader expatriate. If the company fails to communicate proper plans and international strategies, there are greater chances of the expatriates to leave their job.

Global leaders must be trained to maintain work-life balance. Not only the expatriate, but their families should be trained to face the challenge of cross cultural relocation. They must be adaptable to the whole change in social and cultural context, as the culture in Malaysia and India is almost different.

Role of Global Leader

The role of Global leader has become more challenging with time. It is because the MNC’s are expanding a lot on global grounds, and the global leaders need to be aware of cultures and social norms of different regions. The approaches of leadership have changed, where employees just not follow you because you are on top position, they will only accept you as a leader if you have multiple constituencies and decide in a more consensual manner. (Gotham, 2012)

The companies need to invest in their global leaders if they want to be successful. The role of Global leader has amplified with time where he is expected to lead in a way that he sets examples for his sub ordinates. The role of a global leader is important locally and internationally both, these roles are discussed as under:

Local Role of Global Leader

Global leader’s most important attribute is his loyalty with the parent company. It is his role to design strategies which are in benefit of both parent company and the subsidiary. Global leader must be fully aware of the company’s strategies and mission and set future goals accordingly. He must act as a bridge between the local company and its subsidiary. (Vilet, 2013)

Global Leader’s role In International Context

In context of international human resource, a global leader must be able to perform following: (Reiche, 2016)

Must know the risks and opportunities of environmental and social trends. he must be aware of the response of the sector’s stake holders

Must be capable of aligning social and environmental objectives with financial goals of the company

capable of integrating social and environmental trends into strategic decision making

Must be able to identify major stakeholders who have an influence on company

Understand the impact of organization in negative and positive way.

Must have exceptional communication skills to engage in effective dialogue.

He must understand the importance of internal and external stake holders and build partnership with them

He must engage in public policy and contribute towards it.

The global leader must not be biased when making policies. He must ensure the interest of parent company’s and local subsidiary employees.

Conclusion

Globalization has created a number of challenges for the orgamizations and the Human Resurce department. For the efficient performance of the organization, it is important to hire the right candidates for the job. The expansion of companies in other countries and region has increased the work of Human Resource department, creating a need for international human resource strategies.

U Mobile will give importance to cross cultural training of the expatriates. Proper training and development of an expatriate can lead to the success of the subsidiary. In order for U Mobile to expand in India, we need to make sure our 20 employees are aware of the cultural differnces and the organization structure and culture prevailing in India.

The selected expatriates of U Mobile will be given pre departure trainings focusing on the culture, language and social aspects of Indian market. On their arrival to India, they will go through a well organizaed induction plan. This will also focus on the attributes of the organizational structure, the social and legal constraints of the host country.

U Mobile will plan and train its global leader. The expatriates will be recruited keeping in view their roles in India.Training and developing him in a way that he can overcome and face challenges of cross cultural environment. He must be able to communicate efficiently and effectively between the parent company and its subsidiary in India. He must be able to balance work -life otherwise the global leader wont go long way with the company. Not only the expatriates but their families also needs to be trained to help cope up with the challenges of cross cultural and social differences. There are examples in the global world where if expatriate were not trained, it led to the failure of subsidiary.

Therefore, for U Mobile subsidiary to be successful in India, the HR department will play an active role in recruiting the right candidates and training them in a way they out perform in the international market.

Recommendations

The expansion of MNCs in global market is a challenging task. The companies must train and develop exisiting employees and expatriates. Following are some recommendations for U Mobile:

When recruiting, give importance to the local Indian candidates too. Not all postions will be filled by expatriates, therefore, HR department must make strategies where locals and expatriates are treated equally.

The Global leader hired must have all functional and technical knowledge. He must be trained in a way that he can take extra benefits from the local market. He must be trained to overcome the cultural differences of the employees.

The company must ensure a hybrid system, that is a combination of centralized authority and local empowerment. The ranks of global managers and executives must be fully integrated.

The company must ensure it retain its expatriates. And this can be done only when employee see his future is secured with the company. HR department must make proper succession plan for its expatriatres. Where they are trained from their initial years to take role of global leader in future.

Personal Reflection

Working in an international environment is both challenging and exciting. The international exposure not only gave me opportunities to develop my work role, but also helped me develop my personal traits, like confidence, learning different cultures and adopting cross cultural challenges.

I had to face language barriers, as when you are working in an international domain, you get to communicate with people of different origins, speaking different languages. We had to learn to express our thoughts and ideas in a way which is understood by all. Another advantage of working in an international organization is you get exposure to different cultures and social norms. We acquire new possibilities to move forward in corporate world. People from different cultures help me understand the way they approach life. These bring in new ideas and approaches to increase my intellectual capabilities.

Multinational environment works best in increasing social collaborations and relationship between people from different social and cultural backgrounds. It enables us to understand and acknowledge ideas and thoughts of others. Creating an environment where people respect one another.

A multinational culture give you exposure and increase your value in the eyes of other employers. your market value increases locally and internationaly. Having international experience has made me more attractive for the employers and there are more chances of me being involved in interesting international projects and become a part of expansion projects of employer in the furture.

Therefore, working in multinational organization has been fruitful in developing me as an employee and also as an individual. It has enable me to face global challenges technically and functionally. Multi national environment has helped in boosting my confidence when dealing with people of different culture, race, age, religious beliefs and thought process. I have learned to respect others opinion and thoughts and to mold myself according to the needs of international market.

I have learned that if you want to b successful in the corporate world, you must have the ability to change and mold yourself with the global trends. You just cannot restrict yourself to one place or one region. You learn through experience and exposure and for that you need to work in multi national environment, where you team up with people with different cultural and social background.

Therefore, I must say that I have improved as a human being, an employee and a future leader by working in an international environment.